Accounting and Tax Filing Implications in Singapore due to COVID-19

The COVID-19 outbreak has affected businesses and livelihoods around the world. Globally, the coronavirus has caused major shifts in demand, and disrupted caused massive disruptions to the supply chains of local businesses such as yours. If you have been keeping track of your finances, take note of these accounting and tax implications in view of the coronavirus outbreak.

  1. A non-adjusting event (for periods ending 31 Dec 2019)

    Adjusting events are those that provide evidence of conditions that existed at the end of the reporting period. As such, the Institute of Singapore Chartered Accountants (ISCA), the national accountancy body of Singapore, has deemed the COVID-19 outbreak a non-adjusting event for companies with a 31 December 2019 financial reporting date.This is because although the first known cases of COVID-19 surfaced in December 2019, there was no evidence of an outbreak and no adverse changes to the economic and market conditions as a result of COVID-19 as at 31 December 2019. The outbreak was thus deemed to have occurred after December 2019.While non-adjusting events would not affect the amounts included in the financial statements, you will be required to disclose the nature of the COVID-19 outbreak as well as an estimate of its financial effect. If you are unable to estimate the financial effects of the outbreak after making your best efforts to do so, you are still required to disclose that fact.

  2. Other financial events

    Although the COVID-19 outbreak is a non-adjusting event for entities with a 31 December 2019 financial reporting date, it is important that you distinguish impacts that are a direct consequence of the COVID-19 outbreak from those that resulted from other conditions that existed before the end of the reporting period. For instance, bankruptcy after the reporting date may evidence circumstances that already existed at the reporting date and did not result from the COVID-19 outbreak. You are required to exercise judgment over your company’s specific facts and circumstances to achieve fair presentation in your financial statements.

  3. Going Concern

    If your company is experiencing a deterioration in operating results and financial position after the reporting period, you should reassess if the going concern assumption is still appropriate up to the date that the financial statements are authorised for issue. In assessing whether the going concern assumption is appropriate, your analysis should include:

    • all available information about the future (at least 12 months from end of reporting period)
    • whether your company has ready access to financial resources / government assistance to mitigate the liquidity shortfall
    • a wide range of factors relating to current and expected profitability and debt repayment
    • updates to cash flow forecasts

    Where there are material uncertainties which cast significant doubt over your company’s ability to continue as a going concern, you will need to disclose those uncertainties as well.

  4. Annual General Meetings

    In light of the COVID-19 situation, your company may have difficulties holding your Annual General Meeting (AGM). The Accounting and Corporate Regulatory Authority (ACRA) has granted a 60-day extension for all listed and non-listed companies whose AGMs are due during the period 16 April 2020 to 31 July 2020. ACRA will also not impose any penalties on listed and non-listed companies whose AGMs are due during the period 1 April to 15 April 2020 if they hold the AGM within 60 days of the due date. Separately, the Singapore Exchange Regulation (SGX RegCo) will allow listed companies with a 31 December financial year-end up to 30 June 2020 (instead of 30 April 2020) to hold AGMs to receive and consider their 31 December 2019 financial statements.

  5. Annual Returns

    ACRA has extended the deadline for the filing of Annual Returns (ARs).The AR filing due dates for the period 1 May 2020 to 31 August 2020 for all listed and non-listed companies has been extended for 60 days. There is no need for companies to apply for the extension.

    Original Due Date/ Extended Due Date Previously Granted for AGMNew AGM Due DateNew AR Due Date
    16 Apr 2020 to 30 Apr 202015 Jun 2020 to 29 Jun 202015 Jul 2020 to 30 Jul 2020
    1 May 2020 to 31 May 202030 Jun 2020 to 30 Jul 202031 Jul 2020 to 29 Aug 2020
    1 Jun 2020 to 30 Jun 202031 Jul 2020 to 29 Aug 202030 Aug 2020 to 29 Sep 2020
    1 Jul 2020 to 31 Jul 202030 Aug 2020 to 29 Sep 202030 Sept 2020 to 30 Oct 2020
  6. Tax Filing

    As part of support measures to help taxpayers in light of the COVID-19 situation, the Inland Revenue Authority of Singapore (IRAS) is providing an automatic extension of deadlines for tax filing for businesses, as follows.

    S/NTax TypeOriginal Filing DeadlineExtended Filing Deadline
    1Income Tax for Individuals (including sole proprietors and partnerships)18 Apr 202031 May 2020
    2Income Tax for Trusts, Clubs and Associations15 Apr 202030 Jun 2020
    3Estimated Chargeable Income (ECI) for companies with Financial Year ending Jan 202030 Apr 202030 Jun 2020
    4Estimated Chargeable Income (ECI) for companies with Financial Year ending Feb 202031 May 202030 Jun 2020
    5GST Returns for accounting period ending Mar 2020 (GST-registered businesses making GST payments to IRAS will be allowed to file their tax returns based on information available.)30 Apr 202011 May 2020
    6S45 Withholding Tax Forms due in Apr 202015 Apr 202015 May 2020
    7Tax Clearances for foreign employee in Apr 2020-30 Jun 2020
    8Tax Clearances for foreign employees due in May 2020-30 Jun 2020

 

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Posted in Accounting.